PSX August recap: IMF, privatisation, and forex reserves in focus

KARACHI: The KSE-100 index at the Pakistan Stock Exchange (PSX) experienced fluctuating performance throughout August 2024, primarily influenced by anticipation surrounding the approval of the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) and the expected disbursement of associated loans.

Five Pakistani banks see rating upgrade as Moody’s improves outlook

Early in the month, Pakistan secured critical one-year debt rollover commitments from China, Saudi Arabia, and the UAE, marking a significant milestone ahead of the expected final approval of a $7 billion loan programme from the IMF.

Resultantly, the State Bank of Pakistan’s (SBP) reserves increased by $111.6 million, reaching $9.4 billion by the end of the month. However, later reports of delay in IMF’s approval of the loan dampened the market sentiments.

On the other hand, in the latest review by Morgan Stanley Capital International (MSCI), Pakistan’s credit rating was upgraded from Caa3 to Caa2, which lent strength to the investor sentiment. Likewise, the progress in the policy areas with regards to the privatisation of state-owned enterprises, offered support to the private sector and improved trading momentum.

On the final trading day of August (Friday), the PSX continued its positive momentum for a second consecutive session, with the KSE-100 index rising by 138.55 points – on day-to-day basis and 601 points – on a month-on-month basis, to close at 78,488.21 points.

Stock market opens on a positive note, following yesterday’s gains

Average daily trading volumes for August stood at 538 million shares, marking a 32 per cent increase compared to the previous month, though the average daily traded value decreased by 3 per cent to $67 million. Foreign investors were active in the market, purchasing shares worth $7.2 million.